Traffic negotiations bring Amcor development to a standstill

Delays caused by negotiations to widen the notorious Chandler Highway traffic bottleneck are putting pressure on developers of the former Amcor paper mill site in Fairfield.

Developers Glenvill and Alpha Partners were forced to resubmit draft plans for the site after VicRoads intervened mid-year, seeking to acquire a portion of the land to widen Chandler Highway.

The Amcor paper recycling mill in Fairfield. Credit:Craig Abraham

"These unexpected and lengthy delays have put pressure on the contractual deadlines that the site proponents have with Amcor, including triggers for superlot sub-divisions and trunk infrastructure completion of certain stages by December 2015," a council report suggests.

The Chandler Highway bridge is one of Melbourne's main east-west Yarra River crossings and becomes snarled frequently in peak-hour traffic.

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Its unpopularity with motorists prompted the newly elected Labor government to promise voters a $110 million upgrade of the bridge, with two more lanes.

Alpha Partners, run by former Macquarie bank executive Guy Nelson, and Glenvill paid $120 million to Amcor last year for development rights of the 16.5-hectare prime riverside property, which fronts Chandler Highway and Heidelberg Road.

Glenvill founder Len Warson said VicRoads' intervention had held up the project.

"We're in the middle of negotiations. We're getting the land valued that they're looking to acquire. We're awaiting that," Mr Warson said.

The development consortium has started to demolish the large factory on the site but will be forced to spend millions of dollars to clean up contaminated land.

The billion-dollar paper-mill project, which is one of Melbourne's largest infill developments, will include 2720 new dwellings housing up to 4800 residents, plans show.

They also show a large retail centre with 20,000 square metres of floor space for supermarkets and speciality retailers. That is much larger than originally proposed, which has prompted a council review of its suitability as a neighbourhood activity centre.

The site will also house 12,500 square metres of office space, documents show.

Other key proposals include:

An integrated community facility and 80-place early learning centre.

A 180-place prep to year 2 school.

5 per cent of housing (135) for affordable homes.

4.5 per cent of the site for a new riverside park, an industrial heritage plaza, two parks and a piazza.

There are doubts about funding for the school and affordable housing proposals and they might not be developed.

Nearby, work has started on the four-stage Hemingway project, which will turn a 9160-square-metre site on the corner of Perry Street and Heidelberg Road, formerly the run-down Jika International Hotel, into multi-level luxury homes.

The $47.5 million, 55 two- and three-bedroom townhouses developed by Tim Gurner sold within weeks.